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Jagged Edge Files for Chapter 11

Citing weak sales from its winter catalog as a major factor, $3.2 million manufacturer/marketer Jagged Edge Mountain Gear filed for Chapter 11 bankruptcy protection on May 24 in the United States Bankruptcy Court for the District of Colorado.

As things stand now, Jagged Edge will not have enough money to mail its fall 2002 catalog, says marketing and public relations director Jordan Campbell. “The catalog division was too precarious for us,” he adds. The outdoor sports apparel company, which was founded in 1991 by sisters Margaret and Paula Quenemoen, instead will concentrate on its four stores and its wholesale division.

Nonetheless, “we are still looking at the catalog as a viable entity,” says cofounder Margaret Quenemoen. “We are actively pursuing companies that might be interested in acquiring our brand or some aspect of our catalog division.”

For its fiscal year ended July 31, 2001, Jagged Edge posted a net loss before extraordinary income of approximately $698,737. If Jagged Edge hadn’t received $98,190 in income due to the settlement of liabilities with a leasing company and vendors, the net loss could have been greater. The previous year, the company lost $1.2 million.

Catalog sales, which represented about 20% of Jagged Edge’s business, totaled $650,681 for the fiscal year, a 65% increase from $394,076 the previous year. That increase spurred the company to increase circulation of its winter catalog 75%, to about 700,000 catalogs from about 400,000 books the year before. But Jagged Edge’s timing couldn’t have been worse: The winter catalogs dropped around Sept. 11.

Sadly, Jagged Edge had been looking to the winter catalog to help it reverse its downward spiral. As executive vice president Paula Quenemoen told Catalog Age in January, response to the spring/summer 2000 catalog had been so poor, the company discontinued its spring/summer 2001 edition. By last July, Jagged Edge had taken down its Website and sold its remaining stock to Web liquidator Overstock.com, one of its creditors, to resolve some of its outstanding debt.

“We got into trouble, and our viability came into question,” Quenemoen said at the time. “It was at that point that we decided to restructure the way we do everything.”

Partner Content

Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?

But even prior to the economic doldrums of last year, Jagged Edge was finding the going rough. As executive vice president Paula Quenemoen told CATALOG AGE in January, response to the spring/summer 2000 catalog had been so poor, the company discontinued its spring/summer 2001 edition. By last July, Jagged Edge had taken down its Website and sold its remaining stock to Web liquidator Overstock.com, one of its creditors, to resolve some of its outstanding debt.

“We got into trouble, and our viability came into question,” Quenemoen said. “It was at that point that we decided to restructure the way we do everything.” Jagged Edge closed its warehouse and call center, instead outsourcing operations to Orem, UT-based Propeller. The company also relocated from tony Telluride, CO, to Moab, UT.

Partner Content

Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?